Mr. Speaker, I thank my colleague for her question and for the opportunity to address her concerns and highlight the measures we have introduced to help solidify the stability and efficiency of Canada's financial sector.
Maintaining Canada's financial sector advantage is especially important as the global financial system changes and adapts following the global financial crisis. Canada must continue to assess the potential impact of new international standards on our ability to compete and attract investment while maintaining confidence in Canada's capital markets.
For seven years in a row, Canada's banking system has been ranked the soundest in the world by the World Economic Forum in its annual global competitiveness report, something that all Canadians can be very proud of.
However, this government believes our resilient financial system can be even better. That is why, in economic action plan 2011, we announced the government's plan to introduce a framework to allow federal mutual property and casualty companies, or P and C companies, to demutualize, following a request by the industry for regulations to facilitate demutualization, a process by which a company governed by its mutual policyholders converts into a share-based equity company.
We sought the views of stakeholders on the appropriate policy objectives for the optimal demutualization of P and C companies. Through this process, we received more than 80 submissions expressing diverse views from a wide range of stakeholders: federal mutual P and C companies, policyholders and employees, industry associations, insurance brokers, accountants, actuaries, the co-operative sector, and many other interested individuals. Some stakeholders indicated that this framework would increase the competitiveness of demutualized companies by providing them with access to equity to grow their businesses.
In economic action plan 2014, we amended the Insurance Companies Act to allow the government to make regulations for a demutualization framework. In addition, the amendments provided a role for the court in a negotiated demutualization process.
In February of this year, our government released draft regulations for comment. These draft regulations provide those companies that may choose to demutualize with a framework that provides an orderly and transparent process and ensures policyholders are treated fairly and equitably. In considering finalization of the regulations, our government will consider stakeholder comments on this draft.
Let me remind the hon. member that demutualization is entirely optional. The decision on whether or not to demutualize will be in the hands of each respective company and its policyholders.
The P and C demutualization framework also respects existing governance rights of mutual policyholders while ensuring that all policyholders with a reasonable interest in the company can participate in, and receive benefits from, a demutualization process. In addition, the framework ensures an orderly and transparent process. It includes a court-facilitated negotiation process for companies with both mutual and non-mutual policyholders.
Policyholders are being kept well informed through various disclosure requirements and have been provided access to external experts. To give time for recently demutualized companies to adjust to their new structures, demutualized companies are required to be widely held for at least two years.
The P and C insurance industry in Canada provides coverage for Canadians when they need it most. It is an industry that our government will continue to support.